GR 159355; (August, 2010) (Digest)
G.R. No. 159355 ; August 9, 2010
GABRIEL C. SINGSON, ET AL., Petitioners, vs. COMMISSION ON AUDIT, Respondent.
FACTS
The petitioners were members of the Board of Directors of the Philippine International Convention Center, Inc. (PICCI), a government corporation. Pursuant to a Bangko Sentral ng Pilipinas (BSP) Monetary Board Resolution, they were granted a monthly Representation and Transportation Allowance (RATA) of ₱1,500.00 each, in addition to the per diem authorized by the PICCI By-Laws for each meeting attended. From 1996 to 1998, they received RATA totaling ₱1,565,000.00.
The PICCI Corporate Auditor issued a Notice of Disallowance against these payments. The disallowance was affirmed by the COA Corporate Audit Office and, ultimately, by the Commission on Audit proper. The COA ruled that the grant of RATA violated the PICCI By-Laws, which expressly authorized only the payment of per diems to directors. It held that the BSP Monetary Board resolution could not validly amend the By-Laws, as the proper amendment procedure under the Corporation Code was not followed.
ISSUE
Whether the Commission on Audit committed grave abuse of discretion in affirming the disallowance of the RATA received by the petitioners as members of the PICCI Board of Directors.
RULING
No, the COA did not commit grave abuse of discretion. The Supreme Court upheld the disallowance. The legal foundation for the grant of any compensation, aside from per diems, to corporate directors must be found in the corporation’s by-laws or through a proper vote of the stockholders, as mandated by Section 30 of the Corporation Code. The PICCI By-Laws, specifically Section 8, Article III, explicitly stated that directors “shall receive for each meeting attended a per diem… but shall receive no other compensation in any form.” This clear provision prohibits additional allowances like RATA.
The Court rejected the argument that the BSP Monetary Board resolution validly amended the By-Laws. For an amendment to be effective, the Corporation Code requires it to be adopted by the stockholders or members, recorded in the corporate books, and submitted to the Securities and Exchange Commission for a certification of non-inconsistency. The BSP resolution, being an internal act of a single stockholder, did not comply with these mandatory procedures. Consequently, the grant of RATA had no legal basis and constituted an illegal disbursement of public funds. The petitioners, having received the disallowed amounts, were obligated to refund them.